Syrian dictators print money to pay their henchmen

[Sandrine for you]

''Seriously though. US sanctions? EU sanctions? Thanks... but until the UN gets off all 193 of its asses and implements the global freeze on the regime, our reserves are still being siphoned to Lebanon and beyond, and the death squads still recieve their cash for kills.

Ironic: the sanctioned class, the Assads, Makhloufs and co, are the few people that can move money in and out of Syria now. When the revolution began, international bank transfers were locked down. When people started cashing out their bank accounts, the regime said you can't take more than a few thousand without explaining to them why you want it. All so they can appear solvent while they're selling what's left.

And what do despots do when they're finding it hard to pay their henchmen? Of course: they print more money. Want to see the new notes?'':



http://www.banquecentrale.gov.sy/index.html

[pampango]

1. Just printing money may work for a while but it brings hyperinflation in the long run.

Balance sheet on Syria's import ban

The Syrian business community went to bed Thursday night provoked and boiling with rage. Unlike previous weekends, their troubles this time were not because of street demonstrations that have broken out around the country every Friday since mid-March, which have hit their businesses badly and crippled entire sectors like banking and tourism.

Rather, they were furious because of a controversial ban issued Thursday evening by the Ministry of Economy, banning importation of foreign consumer goods. In simple English, this means businessmen can no longer import cars, electronics, air conditioners, TVs, make-up items, spare parts for automobiles, clothes, foodstuff and anything classified as “luxury items.”

The reason, explained the Minister of Economy Nidal Shaar, was to “preserve” Syria’s foreign reserves, adding that the ban was “only temporary”. Previously, the government said that Syria’s reserves stand at a strong $18 billion. Clearly from Thursday’s legislation, it is clear that that number was largely inflated, and Syria is in more trouble than its officials would like to admit.

Income for the Syrian treasury usually came from the following sources: public sector industry (which has been in sharp decline for 30 years because of corruption), income taxes and oil revenue. Oil money usually comes from selling Syrian crude to the West — an outlet that shut down recently when an embargo was imposed on importing Syrian oil. Oil companies doing business in Syria now have to close down, strongly affecting Syria’s access to foreign currency.

Europe, after all, bought 95 per cent of Syria’s oil exports. That, of course, was in addition to the sanctioning of 50 Syrian personalities by the EU, along with companies Europe says are associated with the regime, like the Real Estate Bank and Cham Holding. Turkey, whose trade relations with Syria stood at a strong $2.5 billion, also imposed arms sanctions on Syria last Saturday, threatening to bring bilateral economic relations to a grinding halt.

Assad's henchmen may end up with a lot of money in their pockets but won't be able to use it to buy anything. Lots of money in circulation and few things to buy with it lead to hyperinflation.

[Odin2005]

2. I believe this is the same thing Mugabe did.